Yen Gains against Dollar and Euro Prior to German Decision

By TraderVox.com

Tradervox.com (Dublin) – The Japanese currency advanced against most of its major counterparts as German lawmakers prepare to vote on bailout decision. There is speculations in the market that European leaders will slow in implementing measures to curb the debt crisis in the region which increased the demand for the yen safety. Further, German’s Chancellor Angela Merkel’s comments asking the region’s leaders to establish measures to deal with the crisis without waiting for Germany is an indication that eurozone’s largest economy is no ready to carry other countries. In addition, the Japanese currency increased against the US dollar prior to US data expected to show that jobless claims in the country increased adding to speculations of third round of quantitative easing.

Marito Ueda, a Senior Manging Director at FX Prime Corp in Tokyo, talking about the euro zone crisis indicated that there is nothing that has been solved and there are no signs of solution in the near future. He also added that the current demand for yen is due to lack of other choices in the market. He further made a projection that the euro may drop to as low as 93 yen and $1.18 by the end of September. Such sentiments have gripped the market hence investors are looking for safe haven currencies, and the yen is the most preferred for now.

German lawmakers are preparing to vote on a 100 billion euros aid to Spanish banks after they cut short their vacation. While the lawmakers are expected to pass this motion, Angela Merkel, German Chancellor, indicated that she will not allow Germany to take on any additional burdens.

The Japanese yen rose by 0.3 percent against the euro to trade at 96.47; the yen had touched its strongest since June 1 on July 16 when it touched 96.17. Japanese currency also advanced against the dollar by 0.3 percent to trade at 78.55 yen per dollar.

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